There’s a growing consensus or opinion that well being cannot be reduced to material consumption and that other aspects of life, such as friendship and health are essential to well-being. This article confirms that economic growth actually has a smaller effect on satisfaction then you might think, and that other aspects of life, such as health and unemployment, are actually more important to a persons satisfaction.
Simple surveys like this seem plausible, but according to psychologists, life satisfaction and happiness are not the same thing. Life satisfaction is more complicated, as it forces you to step back and assess your life, while happiness reflects positive and negative emotions that can fluctuate daily.
However, I think we fail to take into account that different things make different people happy. After all, there are 7 billion people in this world, and none of us are the same. I believe it is important we take the preference based approach to well-being, the one that takes into account that people disagree about the relative importance of different life dimensions. For example, some people think that hard work is necessary to have a valuable life while others prefer to spend more time with family, or to go out with friends, while others prefer reading a book in a quiet place.
The “preference-based” comes from the idea that people are better off when their reality matches better with what they themselves consider to be important in their lives. It has been proven that differing approaches to well-being can have practical consequences. According to data compiled by Belgium economists Koen Decancq and Erik Shokkaert. Some results are striking. Danes are much more satisfied than they are wealthy, while France is the opposite. These large divergences are not seen when comparing an equivalent income, however, which suggests that satisfaction in these two countries is heavily influenced by cultural and personal differences.
A lot of these indexes like the Happy Planet Index and World Happiness Index fail to take this into account. Calculating happiness is very subjective. It’s hard to place a level happiness on a particular place when there are constantly different factors and various different standards people can be happy living in. I think that happiness is extremely different for people all over the world. I’ve travelled to very poor countries and have noticed that the citizens are extremely happy and joyful yet they don’t have nearly as much as we do. This makes me question all the stuff we take for granted, and if we would be happier if we didn’t have all the luxuries that make up the world we live in today. I do not think that happiness and the success of a country can be associated together because a country can be successful but have miserable inhabitants and vice versa. In this way, both the Happy Planet Index and the World Happiness Index are inaccurate ways of measuring happiness in ones life, and this article, like me, thinks that happiness is very subjective and isn’t simply decided by a couple of factors.
A Common Consumer Mistake
This article talks about a very common mistake that consumers tend to make on a daily basis ; that is, looking at percentages and “relative values” as oppose to the actual dollars they’re spending. In other words, we as consumers tend to focus on the percentage rather than the money we save or spend. Although this isn’t necessarily true to all consumers, the author of the article, Sendhil Mullainathan, a professor of economics at Harvard, explains that it is a very common problem. He explains different situations where consumers tend to fall prey to this. One particular example was very fascinating to me. He says that when buying earphones, people will spend a lot more money and buy earphones because they’re a better deal. This way of looking at choices is probably not very good, because at the end of the day, it’s the dollars, not percentages that are in your bank account.
Complicating matters is the fact that sellers understand this all too well and know that a lot of consumers think in percentages and not dollars. When you go to buy a new car, at the very end of the transaction, the dealer may suggest some add-ons. And you may be tempted to bite. Once you’re paying tens of thousands of dollars, what’s an extra $200 for a better sound system? Maybe when youre choosing a large flat-screen TV, why not pay a little more for one that is a few inches bigger? Once you have gotten started, large sums can start to feel small.
What all of this amounts to is a tendency to think in relative rather than absolute terms, which for me is really bad. We’ve all fallen prey to this at least once in our lives, but I think its time we start to think in dollars rather than in percentages.
The overall conclusion of the article was quite clear. When it comes to money, consumers tend to look to often at percentages, and not actually what matters, dollars. The article is telling us that when it comes to money, stop looking at relative values and start looking at absolutes. After all, it is the dollars, not percentages, that matter.
Saudi Arabia has a mixed economy. Though much of Saudi Arabia is desert, the country has rich oil reserves that allow the Saudis to buy most of the goods they cannot produce themselves. The Saudi king and his advisors make most of the decisions about how and where to use oil profits. Like most things in this world, this economic system also has its own share of advantages and disadvantages, but is the most popular type of economy with many positives.
Firstly, mixed economies allow many more freedoms than command economies, such as the freedom to possess the means of production; to buy, sell, fire and hire as needed. Secondly, this type of economy permits private participation in production, which creates competition. This market allows for competition between producers with regulations in place by the government to protect the society as a whole. The presence of the government in the economy brings a sense of security to sellers and buyers. This security is what helps to maintain a stable economy.
Of course, mixed economies also have their cons. This type of economy leans more towards government control, rather than the individual freedom that a free trade economy has. This can be seen as a negative. The regulations that the government place on companies can even lead to them being put out of business. Also, another negative is the fact that the government decides the amount of tax on products, which leads to a lot of tax complaints and people who don’t pay them.
The politics of Saudi Arabia takes place in the context of an absolute monarchy, where the King is both the head of state and government. Decisions are, to a large extent, made on the basis of negotiation between the senior princes of the royal family and the religious establishment. Political participation outside of the royal family is limited, although there has been pressure for some time to broaden and increase the participation.
Saudi Arabia’s economy depends predominantly on oil, its main export. Oil accounts for well over half of Saudi Arabia’s economy. Oil funds the country’s education, defense, transportation, health, and housing. Saudi Arabia also has commercial manufacturing and financial industries. The oil industry has made the Saudi royal family quite wealthy. Saudi Arabia now encourages the development of industries other than oil in order to make its economy stronger.
Saudi Arabia has an oil-based economy with strong government controls over major economic activities. It possesses about 16% of the world’s proven petroleum reserves, ranks as the largest exporter of petroleum, and plays a leading role in OPEC. The petroleum sector accounts for roughly 87% of budget revenues, 42% of GDP, and 90% of the countries export earnings.
Saudi Arabia is encouraging the growth of the private sector in order to diversify its economy and to employ more Saudi nationals. Over 6 million foreign workers play an important role in the Saudi economy, particularly in the oil and service sectors; at the same time; however, Riyadh is struggling to reduce unemployment among its own nationals. Saudi officials are particularly focused on employing its large youth population, which generally lacks the education and technical skills the private sector needs.
Saudi Arabia’s main trade partners are the USA, Japan and China. USA is their number one importer at 17.1% and number one exporter at 12.2% Japan is their number two importer and number three exporter. China is their number four exporter and number two importer. Their main export of course is petroleum, while their main imports include textiles, machinery and equipement.